Lockheed CEO plays down impact of Trump’s steel tariff

Lockheed Martin’s chief executive downplayed the impact of wide-ranging global tariffs on steel and aluminum imports into the United States, telling reporters on Monday that she was still studying what the decision would mean for the company. From the factory floor, Lockheed Martin employees work on the F-35 Lightning II Joint Strike Fighter production line in Fort Worth, Texas. (Defense Contract Management Agency)

WASHINGTON — Lockheed Martin’s chief executive downplayed the impact of wide-ranging global tariffs on steel and aluminum imports into the United States, telling reporters Monday that she was still studying what the decision would mean for the company.

Last week, President Donald Trump announced plans to set a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports. On Monday, he tweeted that the policy could be reversed for Canadian and Mexican exports if the North American Free Trade Agreement, or NAFTA, is reworked to be more favorable to the United States.

We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed. Also, Canada must..

Hewson said that, at this point, she hadn’t heard any backlash from Lockheed’s international supply chain or customer base. The company, which relies on sales to foreign allies, is wary the issue could jostle those relationships or lead to marketplace retaliation, particularly if Trump forgoes exceptions for certain U.S. allies.

“There are a lot of questions about the specifics and nervousness that goes with that because it can go in any number of different ways,” said Lockheed’s Robert Rangel, senior vice president of government relations.

Lockheed’s relationship with the president has been complicated. Before coming into office, Trump rebuked the cost of the F-35 Joint Strike Fighter and positioned Boeing’s Super Hornet as a possible alternative. Once he assumed the presidency, Trump involved himself directly in F-35 contract negotiations, having meetings directly with the government’s program head and Hewson to discuss the price of the aircraft.

Since a deal on the 10th batch of jets was finalized, Trump has eased off the F-35 program, praising the aircraft during a September speech at Andrews Air Force Base, Maryland. Meanwhile, Hewson has been effusive in her praise of Trump, calling his criticisms fair and crediting him for reducing the price of the aircraft.

Marillyn Hewson, president and CEO of Lockheed Martin, told reporters she is still studying what the tariff decision would mean for the company. Laura Buckman/AFP via Getty Images)

Hewson on Monday struck a similarly conciliatory tone. Asked what advice she would present to Trump on the tarriffs, she sounded a supportive note in favor of the commander in chief’s ongoing economic policies.

“I would just say for him to continue what the administration is doing, and that’s focusing on competition and fair trade globally,” she said.

“It’s really important for us as a nation to continue to look at how we can continue to be competitive around the world, but at the same time, importantly, that we are also focused on our strategic partners and allies around the world — that we can continue to provide the global security solutions that we all need to work together to address the security challenges.”

Yet again, the F-35 Program Office is having a hard time reaching a final contract agreement with Lockheed Martin.

By: Valerie Insinna

Trump’s tariffs

The president’s decision to set steep tariffs on steel and aluminum is meant to protect national security and economic security, White House trade adviser Peter Navarro said during a CNN appearance Sunday.

“The president was quite clear. We can’t have a country that can defend itself and prosper without an aluminum and steel industry,” said Navarro, the director of the White House Office of Trade and Manufacturing Policy.

The White House expects to implement the tariffs late next week or the week after, going “through all the legal hoops,” he said.

But as fears of a trade war shake the global economy, defense and aerospace industry advocates argue the tariffs will harm national security, not help it.

Navarro said there would be no country exclusions, overruling the Pentagon recommendation for targeted tariffs to avoid angering allies who are needed for other diplomatic and national security reasons, such as Canada and South Korea.

“I understand what the Pentagon said,” Navarro said. “The president understands it very clearly. He heard all sides. And he made a ... courageous, tough decision, and I think it’s the right decision.”

While the response of Lockheed’s CEO was relatively restrained, other industry heavyweights have rang alarm bells about the potential impact of the tariffs. Aerospace Industries Association CEO Eric Fanning said in a CNBC interview days earlier he was concerned the tariffs might provoke marketplace retaliation.

“I’m more concerned with the negative effects this will have on the national security sector,” Fanning said. “We’re always worried about pricing throughout our supply chain. This is going to impact companies big and small in the aerospace and defense world.”

AIA argues the sector needs global sources of aluminum and steel to remain competitive, and that there will be a cascading impact on the cost of parts and components.

“Before issuing tariffs or quotas on aluminum and steel, Trump should consider the impacts of increased costs, decreased supply and disruption to the supply chain on a successful industry that is a key contributor to the U.S. economy,” AIA’s Remy Nathan said in a recent op-ed. “Our country’s history of imposing tariffs on raw materials like steel is not a good one.”